We’d stipulate that most innovation should be focused on updating and changing business models constantly and with increasing focus. With this focus new products and services become by-products or outcomes that support or sustain new business models for driving greater lasting sustaining competitive advantage.
In short, most innovation should be focused on creating new business models, with new products or services serving as enablers to intentional business model innovation, rather than the other way round. This is what we mean by flipping perspectives.
Critically we have to become far more comfortable with constant, ongoing change and aligning this into new innovation and business models. This move to positive change is discussed here, recommending a movement that allows the changes we need within our organizations to become more fluid in their adaption, for leveraging and exploiting innovation in new, far more compelling ways.
This is the fourth in a series discussing the interplay around innovation, so to recap
In a recent series, introduced initially on www.innovationexcellence.com with this one being the fourth post, originally published on June 25, 2015, we discussed the importance of the emerging interplays and how all innovation has the potential to be a new business model and creates change. This series is re-produced here as it is a important concept to consider all the aspects within any innovation interplay.
Both myself, Paul Hobcraft of Agility Innovation and Jeffrey Phillips of OVO Innovation, co-authors of this series, would argue that we are failing to manage the different and multiple interplays that are constantly taking place when innovation occurs. We are often ignoring them and failing to extract the best or optimal value out of the innovation we are introducing.
In a White Paper we have just written called “The Critical Interplay among Innovation, Business Models and Change (6-2)” we provide a foundation document that highlights the important interplay between innovation, business models and change.
A new white paper “Why innovators need a new change paradigm” takes this even further by looking more specifically at emerging models and the competencies required to react to this change in more ‘fluid’ ways. You can find the download links at the bottom of this post.
The Interplay is Demanding Change and New Models
If innovation continues at a high pace, and forces change across customers, the market and the innovator, as well as creating new business models, then we can easily accept that innovators must be good at planning for and executing change. Innovation and change are somewhat symbiotic: sustained innovation cannot occur without good change capability, and innovation creates demand for change.
When we add in the interplay across innovation, business models and change it’s evident that change is a constant, and will only increase. Yet there is a significant problem: existing change models that describe how we think about and implement change no longer seem valid, given the nature and the pace of change.
Innovators need a new change model
We innovators need a new model of change, for at least seven important reasons:
- As innovators we aren’t simply responding to external change, we are creating change, both for customers and for our companies and markets. (inside, proactive change vs external, reactive).
- External change is far more unpredictable, in global markets new threats emerge from anywhere, at any time and often delivered in totally unpredicted business models.
- The pace and nature of change isn’t slowing, but is accelerating and will continue to accelerate. (increasing pace, frequency and amplitude of change).
- As we’ve demonstrated, most innovation has the potential to be business model innovation, which will require change. (As more innovation becomes focused on business model innovation, this will create even more change).
- We recognize that change is no longer an occasional threat but a constant companion (shift from the idea of change as a threat to change capacity as a competitive advantage).
- The idea that companies can achieve a protected steady state where change won’t affect them doesn’t seem to apply anymore (long periods of stasis, or standing still are no longer possible. Must be able to change/evolve constantly).
- We need to think of change as a capability that we constantly deploy, rather than a threat we typically avoid. (Need to develop change as a capability, to build skills, reduce barriers).
For these reasons the concept of unfreezing and refreezing does not seem appropriate anymore. As change becomes more constant, and as we ourselves create change through innovation and business model development we must be much more open to, and welcoming of, change. Rather than viewing change as an occasional nuisance or hurdle, we must build capabilities that allow us to implement change constantly, building barriers for other companies that don’t embrace change or can’t change quickly and capably.
Factors that must change
Perhaps the biggest change to status-quo thinking about change is the concept of a protected steady state where the organization can “freeze” and resist or deflect change for a long period of time. The nature of competition is so fierce that we cannot wall off a market, a segment or a company and avoid change. Rather we need to create capabilities, systems and knowledge that allows us to embrace change and use it to our advantage, whether we create the change through new innovation or the change is thrust upon us from external factors or competitors.
Another concept that must be rejected is the idea that change is difficult, distracting and problematic. In the older unfreeze-refreeze model the goal is to experience a significant amount of change in the shortest amount of time, moving as quickly to the new steady state as possible. This signals a lack of engagement, resistance to change and avoidance. Why would we reinforce avoidance of change when the winners in the future markets will be the firms that can embrace and manage change, who are constantly creating change through new innovation? We need to create the belief that change is a positive experience and change capacity creates a positive differentiator for those who invest in the skills and methods.
The old change model indicates signals that a company must endure a brief change activity to win a long period of quiet in the new operating state. This promise of eventual stability is misleading and based on historical data, not future trends and indicators. The older model makes promises that competitive forces contradict. New realities suggest that we need to be constantly adapting to emerging opportunities and threats, and building change capabilities. Perhaps a new model for change is:
Unfreeze the Rigid – Build change capabilities/reduce cultural barriers – Create change/Promote Fluidity
In this suggested change model we recognize that rather than adapting to a new reality, we need to build and sustain change capabilities to be prepared for any eventuality. In the new “state” we don’t expect to sustain a new status quo but to create change and remain capable and be constantly fluid, embracing change and innovation consistently.
To succeed in future markets that will possess far more change, at a much higher rate than before, with far more innovation, we need a new model for change that shifts the concept of change from an occasional, painful interruption to a consistent, evolving capability. First we need to understand the existing barriers and challenges associated with change. Then we’ll need to build change capabilities, and finally create a new operational and cultural structure to sustain change.
Fluidity is becoming our growing need of understanding today
There is considerable discussion around changing structures and models to become more adaptive, agile and fluid. With such an increasing level of complexity and environmental turbulence that organizations are having to master, most of their existing systems, processes and approaches are facing increasing challenges. The solutions of fluid, agile and adaptive are aiming to develop highly flexible and fluid organizations as an attractive answer to move towards.
There is so much change being undertaken, the growing call for quick improvisation and ad hoc responses all needs to take us away from those rigid processes into open and fluids ones.
To obtain BOTH White Papers you can DOWNLOAD by going to